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A committee of directors of CBH Resources Limited (CBH), independent of the company’s largest shareholder Toho Zinc Co., Ltd, said it considers the revised Nyrstar Proposal cannot be successful in its current form and instead endorsed the revised Toho Proposal and recommended it to CBH shareholders, subject to no superior proposal emerging. The committee said that given the voting thresholds that apply under a scheme of arrangement, Nyrstar’s recent revised proposal would clearly fail.

CBH said the revised Toho Proposal would involve CBH shareholder approval for the sale of a 50% interest in the Rasp Project at Broken Hill to Toho for $57.5 million, the establishment of a joint venture for the ownership and development of the Rasp Project, and the sale of the company’s 50% share of zinc and lead concentrates from the Rasp Project to Toho for the life of the Rasp Project.

The company said other elements of the proposal include Toho making a proportional takeover offer for ordinary shares in CBH at 25c per share, so that Toho would have a relevant interest in not more than 49.9% of total issued shares of CBH, and CBH would make an offer of $500 in cash and 1,800 CBH shares per CBH Note for all of CBH's outstanding Notes

Managing director, Stephen Dennis, said Toho’s revised proposal would provide shareholders the opportunity to receive significant near term gains on a portion of their CBH shares, and the opportunity to participate in the future growth of the company through the development of the Rasp Project and the planned increase in production at the Endeavor Mine.

”The de-levering of the company, along with Toho’s undertaking to support CBH in financing the Rasp Project, will also ensure that this important new mine is brought quickly into production,” Mr Dennis said. 

As at 1046 AEDT, CBH shares were trading at 18.5c.  

JPMorgan downgrades Corporate Express Australia to UNDEWEIGHT with a $5.21 price target. Goldman Sachs downgrades the stock to HOLD with a $5.60 price target.

BHP Billiton Limited (BHP) believes it can finalise the Western Australia iron ore production joint venture with Rio Tinto Limited (RIO) this calendar year. As part of its commitment to increasing its capital expenditure to around $20 billion next year, BHP plans to spend $5.8 billion on the equalisation payment for the JV.

In his final letter to shareholders before he retires chairman, Don Argus, said the company remains cautious about the state of the global economy and noted the recent International Monetary Fund report, which predicted the output from advanced economies between 2007 and 2011 would grow by 1.9%, while the developing companies would be 22.1%.

”We are very mindful that most countries have difficult decisions to make regarding a wind back of stimulus packages, against the backdrop of financial services sector reform, and how they boost economic growth,” Mr Argus said.

“Governments play a key role in spurring productivity, encouraging investment and fostering international competitiveness.”

He added that policies which reduce free cash flow from profits generated after tax could affect a company’s capacity to pay future dividends.

Jac Nasser is set to takeover as chairman of BHP on 30 March this year. Mr Argus has been a member of BHP’s boards for 13 years, with the last 10 years as chairman.

At the close of trade yesterday, BHP shares were trading at $43.30.

Following yesterday’s first half result for David Jones, Credit Suisse (NEUTRAL, price target $5.50) downgraded the stock to neutral. The broker said the David Jones was trading at fair value with few near term catalysts to drive a re-rating.

David Jones maintained guidance for 5% to 10% NPAT growth in 2H10 and FY10 and 5% to 10% NPAT growth in FY11. Credit Suisse noted that David Jones had de-risked its gross margin several years ago, and 1H10 margins surprised slightly on the upside.

The broker’s neutral view on the stock is based on a view that the stock is fairly valued. The broker said the DJS is trading at 14x FY11 EPS and lacks near-term catalysts for outperformance. Credit Suisse said this inertia reflects the fact that DJS did not change guidance, caution around 4Q trading and capital management being off the agenda until 2012.

UBS (NEUTRAL, price target $5.15) says a positive earnings surprise is unlikely because the company is cycling off the stimulus boost in last year’s fourth quarter and an earnings drad from the ramp up at the Bourke St store. Citi (HOLD, price target $4.85) added that retail sales conditions would be volatile over the next half year.

Goldman Sachs (BUY, price target $6.24), however, was more bullish on the retailer. The broker said that uncertainty surrounding the cycling of one-off fiscal stimulus has seen the market excessively de-rate discretionary retailers. At a DJS specific level, Goldman Sachs says it is attracted to the stock due to leverage on new store, solid cost control and margin management.

Kathmandu Holdings Limited (KMD), which first listed on 13 November 2009, has posted an $11.3 million loss for the six months to 31 December 2010. The major driver for the loss was the company’s costs associated with listing on the ASX, without which the clothing retailer would have posted a $3.6 million profit, from a loss last year of $2 million.

To list on the ASX and the NZ stock exchange, IPO costs were around $16 million.

Looking ahead, Kathmandu said it was confident that it will meet the full year FY10 guidance of EBIT NZ$50.6 million ($39.1 million) and NPAT of NZ$30.9 million ($23.9 million), after allowing for the full year pro forma adjustments contained in the prospectus.

Turning to the results for the previous six months, Kathmandu said sales had climbed nearly 22.2% to $85.8 million, while EBIT was up around 43% to $12.5 million.

Commenting on the result, Mr Halkett said the results were achieved in an improved retail environment, and reflected both a successful ongoing store rollout programme and a strong sales result from the Kathmandu Christmas sales promotion.

“Whilst this was a very positive result and ahead of our prospectus forecast it must be remembered that Kathmandu’s first half year provides a relatively low proportion of the full year’s profit,” Mr Halkett said.

”Also we are cycling a stronger trading performance in the second half year of FY09 compared to first half year FY09.”

Mr Halkett said that the government stimulus packages in Australia and New Zealand strongly supported the company.

“We do expect Australian trading for the second half year to be similarly impacted from cycling the autumn 2009 Australian stimulus package.”

At the close of business Wednesday, Kathmandu shares were trading at $1.74 each.

In a joint statement released yesterday afternoon, Metcash Limited (MTS) and Mitre 10 Group said the Supreme Court of Victoria approved the inter-conditional schemes of arrangement between the two companies. Under the scheme Metcash would acquire a 50.1% interest in Mitre 10 in return for injecting an estimated $55 million of new equity capital into the Mitre 10. The companies said the court’s approval of the schemes follows the approval by Mitre 10 Australia Limited and Mitre 10 Limited shareholders at scheme meetings held last Friday.

Spotless Group Limited (SPT) has completed the acquisition of the privately owned international cleaning and outsourced services company, CE Property Services Group ‘Cleanevent’. Spotless said the Cleanevent has revenue of over $140 million, with approximately 60% of revenue generated in Australia. The company said the acquisition was comfortably funded from existing debt facilities. Spotless added that the acquisition provides Spotless’ Facility Services operations with an established presence in new geographies including the United Kingdom, Europe, the United States and the Middle East.

The Dow closed at 17-month highs Wednesday following the decisions by the US and Japanese central banks to keep interest rates unchanged and the US senate passing a US$17.6 billion jobs bill. Optimism of an economic recovery saw commodity stocks rally.

The Dow and S&P 500 have risen 13 of the last 14 sessions, while the Nasdaq has closed higher in 12 of the last 14 sessions.

In economic news, the Producer Price Index (PPI) weakened 0.6% in February. Forecasts were for a 0.2% decline after gaining 1.4% the previous month.

The Dow Jones gained 47.69 points, or 0.45%, to 1,0733.67, the S&P's 500 added 6.75 points, or 0.58%, to 1,166.21 and the NASDAQ rose 11.08 points, or 0.47%, to 2,389.09.

Bank of America led the financials higher with a 1.4% gain.

JPMorgan put on 1.3%, while insurer AIG rallied 2.4%.

Aluminium producer Alcoa climbed 4.8%.

Tech majors closed either side of the gain line. Oracle and Microsoft advanced 1% and 0.9%, while IBM shed 0.7%.

Energy stocks tracked the price of crude higher as it reached two-month highs. Exxon Mobil and Chevron added 1.2% and 0.9%

NYMEX light crude oil for April delivery rose US$1.23 to settle at US$82.93 a barrel.

COMEX gold for April delivery rose US$1.70 to settle at US$1,124.20 per ounce.

European Markets

European markets also reached 17-month highs after the US Fed’s pledge to leave borrowing rates at record lows for some time yet. Miners made ground due to a rise in metals prices.

The benchmark UK FTSE 100 rose 24.20, or 0.43% to 5,644.63. The French CAC40 added 18.94, or 0.48% to 3,957.89, while the German DAX gained 53.29, or 0.89% to 6,024.28.

Anglo American and Rio Tinto added 1.8% each, while the world’s largest miner BHP Billiton gained 1.6%. 

UK banks Standard Chartered and HSBC gained 1.9% and 1.4%.

In France Societe Generale rallied 2.2%, while Germany’s Deutsche Bank added 1.5%. 

Swiss bank EFG International surged 12% after beating full-year earnings estimates.

Operator of Britain’s longest rail route, Arriva, spiked 17% after receiving a takeover offer.

Inditex put on 3.5% after international sales saw the clothing retailer post a better than expected 18% increase in fourth-quarter net income.

Japanese Markets

Japan’s Nikkei reached an eight-week high after the Bank of Japan doubled the size of a lending operation it put in place in December.

The Nikkei 225 gained 125.27, or 1.17% to 10,846.98.

Nissan advanced 2.5% on speculation that along with Renault it will form an equity alliance with Daimler.

Honda edged 0.2% higher as it recalled over 400,000 vehicles due to a fault in a brake-system.

Chip-related stocks moved higher on speculation Intel will release positive guidance for the current quarter in the US. Tokyo Electron and Advantest added 1.4% each.

Elpida Memory rose 1.6% on reports it will return to annual profit at the end of the month. 

Mitsui Mining & Smelting Co surged 5.8% after upgrading its full year operating profit forecast.

Japan’s largest commodities trader Mitsubishi Corp put on 1.3% on rising commodity prices.

Energy stocks Nippon Oil Corp. and Inpex Corp. jumped 3.8% and 2.2%.

Nippon Mining Holdings gained 3.7%.

Hong Kong Markets

The Hang Seng bounced back declines in the three previous sessions to post strong gains and take the Hang Seng to two-month highs. Banks and property stocks led the rally.

The Hang Seng rallied 361.56, or 1.72% to 21,384.49.

ICBC, one of the world’s biggest lenders, gained 1.4%, while Bank of China rallied 2.1%.

HSBC put on 1.8%.

Property developers Hang Lung and Sun Hung Kai Properties advanced 3.2% and 4.1% respectively.

Another developer, Poly, spiked 4.5% after saying it would pay $627 million for Chinese focused developer Rapid Bloom.

Meanwhile Macau gambling company, SJM Holdings, surged 6.3% on the prospect of greater protectionism for its stake on the island.

Hong Kong & China Gas put on 3.8% after posting a 20% hike in profits, while Jiangxi Copper rallied 2.9%.

The Australian sharemarket rallied Wednesday to eventually close 1.2% higher. The market was buoyed by better than expected housing data and a positive lead from Wall Street after the US Fed decided to keep interest rates unchanged.

At the end of the day, the All Ords had added 57.8 to 4,866.9, while the ASX/200 gained 56.0 to 4,853.2. Over 2.6 billion shares worth around $5.5 billion had changed hands.

Broad gains were seen across most sectors, including the Materials and Resources sector, which put on 1.6%.

Mining heavyweights BHP Billiton and Rio Tinto added 1.3% and 1.6% to $43.30 and $76.70 respectively as base metal prices rose in London overnight.

In a quiet news day, the gold miners rose similar amounts. Lihir added 5c to $3.11, while Newcrest put on 61c to $34.13.

Steelmaker Onesteel and aluminium producer Alumina climbed 3.5% and 3.9% to $3.82 and $2.90.

Elsewhere homebuilders were strong on the back of local data and as the US market appears to be stabilising. James Hardie advanced 26c, or 3.5% to $7.67, while Boral rose 13c, or 2.4% to $5.52.

According to the the Australian Bureau of Statistics dwelling commencements climbed by a seasonally-adjusted 15.1% in the December quarter. Work was started on just over 40,000 homes in the period, the largest increase in 18 months.

The Banks and Financials sector gained 0.9%.

Westpac and ANZ added 1.6% and 1.9% to $27.34 and $24.61 to be the best of the big four banks.

Macquarie was 73c higher to $49.37, while insurer AMP led that sub-sector higher with a 12c gain to $6.27.

Platinum Asset Management jumped 5.5% to $5.55.

Westfield shares were 0.3% weaker to $11.84 as the Property Trusts dragged to finish 0.7% in the red.

Mirvac shed 2.5c, or 1.7% to $1.475.

Energy stocks followed their international peers higher with a 2.3% rise. Uranium specialists were standouts with Rio Tinto controlled ERA rallying 5.6% and Paladin climbing 3.9%.

Extract Resources was 5.2% stronger.

Meanwhile, Woodside rose $1.04 to $45.80 and Origin added 33c to 16.65. The latter said it has increased its interest in the Otway Gas Project to 67% following completion of the acquisition of an additional 36% interest from Woodside.

Oil Search gained 22c, or 3.9% to $5.88, while WorleyParsons put on $1.01, or 4.0% to $26.20.

The Consumer Discretionary stocks rose 1.4%. Billabong surged 44c to $10.74 following yesterday’s sell-off after going ex-dividend.

David Jones shares were up 6c to $5.13 despite the department store posting a record first half profit of $100.5 million and saying full year profit growth was expected to be between 5% and 10%.

Among the gamers, Crown put on 27c, or 3.4% to $8.32.
 
Consumer Staples was flat as Wesfarmers retreated 45c, or 1.4% to $31.10, while Woolworths gained 44c, or 1.6% to $28.72.

The major mover, however, was AWB which tumbled 12c, or 11.4% to 93.5c after downgrading its profit guidance.

The Industrials sector was 1.6% stronger as most stocks traded above the gain line.

Toll and Asciano were 2.4% and 2.9% higher, while Leighton climbed $1.48, or 3.9% to $39.85.

Waste services company, Transpacific put on 3.5c, or 2.7% to $1.33, while Bradken also rallied, up 37c or 5% to $7.70.

Telstra continued its recovery from all-time lows of $2.88 earlier this month, adding 2c, or 0.6% to $3.13, while the broader Telecommunications sector put on 0.5%.

Around the region, the Nikkei 225 rose 91.4 to 10,813.1, while the NZSE50 fell 6.8 to 3,201.0. The Straits Times Index gained 18.1 to 2,914.5. The Hang Seng climbed 330.7 to 21,353.6.

Spot gold was trading at US$1,127.70 per ounce, while the Aussie was buying US$0.9186.

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David Jones posts record profit
David Jones reported a post-tax profit for the six months to 31 January 2009 of $100.5m, up 10.2% from the previous corresponding figure. Just one year out from the GFC the department store said the result was the highest first half profit since the company listed on the ASX 15 years ago.

At the close, David Jones shares were up 6c to $5.13.

AWB downgrades full year guidance
AWB downgraded its forecast profit before tax and significant items for the full year ending 30 September 2010 from previous guidance of $115m to $140m to a range of $85m to $110m. The agribusiness attributed the decrease to the expected reduction in annualised profit before tax of $7 million to $10 million due to the sale of the Landmark Financial Services loan and deposit books.

At the end of the day, AWB shares were down 12c to 93.5c.

Macmahon awarded $190m contract
Macmahon Holdings announced last night that it has been awarded a three-year contract valued at over $190m by Syntech Resources to develop and operate the new Cameby Downs coal mine in the Surat Basin in Queensland. The company said the contract would see it undertake all mining activities for Stage 1 of the project, including planning, mine development, waste stripping, coal mining, coal preparation and train loading.

At the close, Macmahon shares were up 1.5c to 75.5c.

Origin's interest in Otway Gas Project now 67%
Origin Energy increased its interest in the Otway Gas Project to 67% following completion of the acquisition of an additional 36% interest from Woodside Energy. The company said the purchase price was $520 million, which remains subject to a further adjustment on the settlement of final joint venture accounts up to the completion date.

By the close of trade, Origin shares were up 33c to $16.65, while Woodside shares were up $1.04c to $45.80.

Corporate Express a takeover target
Corporate Express said that US-based Staples would acquire all shares in the company at $5.60. The decision to accept the offer was arrived at by the independent director’s who said the offer valued the company at around $1 billion.

Corporate Express Australia Limited (CXP) said that US-based Staples would acquire all shares in the company at $5.60. The decision to accept the offer was arrived at by the independent director’s who said the offer valued the company at around $1 billion.

Corporate Express shares are currently halted, however the offer represented a 25.1% premium to yesterday’s closing share price of the office supply company.

It also represents a 40% premium to the average price over the last three months.

The company said that would also enquire with the ATO, seeking a special fully franked dividend of 78c per shares, for a value of $132 million.

The chairman of Corporate Express, Ian Pollard, said the company would recommend shareholders take up the offer.

“The total offer consideration provides an attractive premium and compares favourably with recent similar transactions," Mr Pollard said.

"When the franking credit benefits are taken into account, there is potential to add additional value for shareholders.”

Cochlear Limited (COH) announced the resignation of Tommie Bergman as chairman and non-executive director, effective 30 June 2010. The company said Rick Holliday-Smith would succeed Mr Bergman as chairman. Cochlear said Mr Holliday-Smith was appointed a director in 2005 and is currently chairman of the Audit Committee and a member of the Nominations and Remuneration Committees. The company said Mr Holliday-Smith is currently a director of Servcorp Limited and also chairman of un-listed Snowy Hydro Limited.